Predevelopment Loans

Predevelopment lending is the critical piece of funding that developers need to get a deal from a tax credit award to closing. During this time, developers are on their own to cover a wide variety of expenses such as architectural and engineering fees, acquisition costs, and third-party reports. NEF's predevelopment lending provides critical early-stage capital to help our sponsors develop affordable rental housing. Our loan product can reimburse you for costs already incurred and can cover future project-related expenses.

NEF predevelopment loans

Available for all NEF tax credit syndicated deals; both 9% and 4% transactions
Loan sizing - up to $2M, can go higher if the loan is used for acquisition
Loan term for up to 12 months with available extensions

Security and Collateral

NEF requires full recourse to the borrow, and if it's used for land, we also need a first lien position.
The financial strength of the borrow also helps us determine max loan sizes.
For guarantors with liquidity and net worth below $500,000, the predevelopment loan amounts will be limited to $500,000 per project.
If liquidity and net worth are below $1M, we can do a max loan amount of $750,000. We can do higher loan amounts when you get over the $1M threshold.

This product is available on all NEF syndicated deals and project types. We are supporting both acquisitions/rehab and new construction projects.

ELIGIBLE USES OF FUNDS

NEF predevelopment loans can be used to cover:

Acquisition of land or buildings
Third-party reports
LIHTC Application Consultant Fees
Tax Credit Reservation and Carryover Fees
Demolition and Environmental Abatement
Other costs as approved by NEF’s Chief Risk Officer

KEY CONTACT

Daryl Shore
Head of Structured Finance

Contact Us

Email Daryl Call Daryl